Assertion Not checkable as stated
Subotovsky: Silicon Valley consensus believed video conferencing was a solved market
“I don't fault people here in the Valley for saying video conferencing is done. It's not going to happen again. It's a race to the bottom. There's no room for a new player.”
Opinion
Subotovsky: Emergence's focused SaaS strategy outperforms diversified VC firms
“So for us at Emergence, we all love that phase, and that's why we should be a lot better than more diversified firms because we have a very targeted approach.”
Assertion Not checkable as stated
Subotovsky: Emergence Capital generates most fund returns from first two checks
“What we realize for our fund and our strategy, we typically generate most of the returns when we write that first and second check. Then everything else we do afterwards, it's not in line with the initial returns that we're generating.”
Prediction Not checkable as stated
Subotovsky: Emergence Capital will not blindly exercise pro-rata rights
“So our strategy has shifted over the years from we want to participate in every round until the company goes public and beyond, to we're going to Be incredibly concentrated early on, and then we're going to help those companies find the right partners to suppo…”
Assertion Supported
Subotovsky: Multi-stage VC funds follow on in only 30% of early investments
“A lot of entrepreneurs underestimate the negative effect of signaling. They raise from this multi-stage funds, and this multi-stage funds are incredibly focused, and typically they follow on on about 30% of their earlier stage investments, and that's an incred…”
Prediction Not checkable as stated
Subotovsky: VC will be disrupted by specialized capital, not mega-funds
“I feel that venture capital is going to get disrupted, and I feel it's not going to get disrupted by humongous funds. It's going to get disrupted by people who are funding businesses and are providing the right capital for the right needs.”
Insight
Subotovsky: VC should only fund early risk, not proven models
“Venture capital should be used For discovery, for product development, early on when you're taking a risk, then when the model is working out, you should be able to access a different type of capital, and we're gonna start seeing those distinctions for differe…”
Disclosure
Subotovsky: VCs rejected him in 2010 due to demographic background
“I talked to a number of venture firms, and the message that I got from a lot of venture firms was that given my background, I was not a perfect fit for venture. And when I double clicked on what they meant by that, it was more that there were not a lot of Lati…”
Insight
Subotovsky: Venture capitalists are fundamentally sales reps
“I mean, if you distill everything down to the essence, we're sales reps as venture capitalists.”
Assertion Not checkable as stated
Subotovsky: VC demographic biases dictated which entrepreneurs received funding
“People had very strong biases in terms of who's the right person to be in venture, who's not. And that translated into who's the right entrepreneur that I want to back and who's not.”
Insight
Subotovsky: Two-week fundraising cycles are problematic in most cases
“It's like getting married after meeting someone online for two weeks, chatting, and then the next thing you do is you get married. That's, I mean, the majority of the cases, that's going to be problematic. You might get lucky every now and then, but it's going…”
Disclosure
Subotovsky: Emergence Capital missed out on investing early in Cloudflare
“So the biggest miss that I've had is when I first joined Emergence one of my good friends and classmates, Matthew Prince and Michelle, were getting started with Cloudflare, and I invited them to present here at Emergence, and I didn't know how venture worked, …”
Insight
Subotovsky: Founders usually avoid live product demos during pitch meetings
“When someone's pitching, they typically try to stay away from demos because they don't work.”
Insight
Subotovsky: Zoom founder Eric Yuan prioritized fit over maximizing valuation
“Eric has always been this incredible human being focused on the right thing and not focused on, oh, I want to get the best customer or the best deal or the best valuation or the best pricing. He's always focused on finding the right customer, the right valuati…”
Insight
Subotovsky: Supporting full executive teams creates maximum leverage for CEOs
“Because what I realized is for a CEO, if you can help them build stronger relationships, and if you can help the executives be better at what they do, that helps the CEOs, and that helps the company. So I make it a priority to give the CEO leverage by helping …”
Insight
Subotovsky: Key startup board decisions happen in one-on-ones, not meetings
“And over time, what I realized is that those board meetings are great opportunities to align everyone, but most of the work gets done outside of board meetings. So the big decisions come up when you're having this one-on-ones with the CEO, the CMO, the head of…”
Insight
Subotovsky: Enterprise SaaS requires solving business problems, not just pleasing users
“If you don't do that, if you're not solving a real business problem, and you're just solving something that the end user wants, but that's it, you're not going to be able to build a true enterprise company.”
Disclosure
Subotovsky: Emergence Capital partners average one new investment per year
“So we invest in anywhere between five to seven new companies a year. That means that each partner here will do about one new investment a year.”
Disclosure
Subotovsky: Emergence Capital targets 20 to 22 companies per fund
“We typically have about 20 to 22 companies per fund, and that works incredibly well, because over three to four years, we're gonna partner with five to seven new companies a year, and we're gonna build incredibly strong relationships.”
Prediction Not checkable as stated
Subotovsky: Emergence Capital prioritizes ownership targets due to portfolio concentration
“At emergence, given that we're focused on early stage, we're going to write a check and we're going to focus on ownership. Given that we have this concentrated portfolio, we need to get paid if things work out, because we're going to do a lot of work for those…”
Disclosure
Subotovsky: Emergence Capital requires unanimous partner enthusiasm to make investments
“We want to make sure that we have what we call unanimous enthusiasm, meaning that everyone around the table is excited, not just supportive, to partner with this entrepreneur.”
Insight
Subotovsky: Ending an investor relationship is harder than getting a divorce
“At least if you get married, you can get a divorce. Here, divorces are much harder to pull off.”
Prediction Open · timeframe Jul 2029
Subotovsky: Next-gen startups will disrupt legacy email, CRM, and calendar incumbents
“Email, calendar, CRM, marketing automation, those haven't changed significantly in decades. So I believe that in the next 10 years, we're gonna see a lot of the leading companies in those categories disrupted by new generations of companies that are rebuilding…”
